September 15, 2019

Accounting News Roundup: Ernst & Young Wants Lawsuit Dismissed; KPMG Study Finds Goodwill Impairments Slowing; Deloitte Names New Tax Partners | 06.07.10

Lehman, Nortel, Bank of America, Google in Court News [Bloomberg BusinessWeek]
Dick Fuld and the rest of the ex-Lehman Brothers management team as well as Ernst & Young asked a judge to throw out the lawsuit against them brought by the Alameda County Employees’ Retirement Association in Oakland, California, and the Government of Guam Retirement Fund.

This lawsuit focuses on the failed disclosure by Fuld et al. of the use of Repo 105 and E&Y’s confirmation of its usage as being in accordance with U.S. GAAP.


George Clinton in funk: Accountants sue Parliament-Funkadelic star over fees [NYDN]
GC engaged Wlodinguer Erk & Chanzis to audit his royalties from Universal Records and EMI in 2003. The firm claims that they have only been paid $25,000 while the agreement they had stated that WEC would receive 20% of the $1.2 million settlement Clinton received.

KPMG Study Shows Tapering Off in Goodwill Impairment [Compliance Week]
How bad of a year was 2008? KPMG’s recent study of goodwill impairment charges of 1,700 U.S. public companies found that ’08 was a bloodbath “KPMG’s study shows goodwill impairment charges across the 1,700 companies fell from $340 billion in 2008 to $92 billion in 2009. Only 12 percent of companies in the study took a charge for goodwill impairment in 2009 compared with 17 percent in the prior year.”

And of that bleeding, banks were considerably less involved, “The study showed the technology hardware sector accounted for 23 percent of total goodwill impairment charges in 2009, followed by telecommunication services. Banks had the highest level of goodwill impairment charges in 2008, but represented only 4 percent of the total goodwill charges in 2009.”

Inquiries mount after PwC ‘failed to notice’ mistakes [Times Online]
JP Morgan settled with the UK’s Financial Services Authority (“FSA”) last week over its mishandling of client funds, fining the bank £33.3 million. Now the Financial Reporting Council and the Institute of Chartered Accountants in England and Wales, who both oversee accountants in the UK, are now expected to launch inquiries into PwC’s role in JPM misallocation of client funds of £1.3 billion to £15.7 billion between 2002 and July 2009:

In addition to serving as principal auditor, PwC was retained by JP Morgan to produce an annual client asset returns report — a yearly certification to prove that customers’ funds were being effectively ring-fenced and therefore protected in the event of the bank’s collapse. But PwC signed off the client report even though JP Morgan was in breach of the rules.

MOVES-Barclays Wealth, Deloitte, BlueCrest Capital, RFIB [Reuters]
Reuters reports that Deloitte’s tax practice promoted eight new partners: Pippa Booth, Andy Brook, Stephen Brown, Christie Buck, Sue Holmes, Anbreen Khan, David McNeil and Marcus Rea and three associate partners: Andrew Cox, Ashley Hollinshead and Claire Wayman.

Lehman, Nortel, Bank of America, Google in Court News [Bloomberg BusinessWeek]
Dick Fuld and the rest of the ex-Lehman Brothers management team as well as Ernst & Young asked a judge to throw out the lawsuit against them brought by the Alameda County Employees’ Retirement Association in Oakland, California, and the Government of Guam Retirement Fund.

This lawsuit focuses on the failed disclosure by Fuld et al. of the use of Repo 105 and E&Y’s confirmation of its usage as being in accordance with U.S. GAAP.


George Clinton in funk: Accountants sue Parliament-Funkadelic star over fees [NYDN]
GC engaged Wlodinguer Erk & Chanzis to audit his royalties from Universal Records and EMI in 2003. The firm claims that they have only been paid $25,000 while the agreement they had stated that WEC would receive 20% of the $1.2 million settlement Clinton received.

KPMG Study Shows Tapering Off in Goodwill Impairment [Compliance Week]
How bad of a year was 2008? KPMG’s recent study of goodwill impairment charges of 1,700 U.S. public companies found that ’08 was a bloodbath “KPMG’s study shows goodwill impairment charges across the 1,700 companies fell from $340 billion in 2008 to $92 billion in 2009. Only 12 percent of companies in the study took a charge for goodwill impairment in 2009 compared with 17 percent in the prior year.”

And of that bleeding, banks were considerably less involved, “The study showed the technology hardware sector accounted for 23 percent of total goodwill impairment charges in 2009, followed by telecommunication services. Banks had the highest level of goodwill impairment charges in 2008, but represented only 4 percent of the total goodwill charges in 2009.”

Inquiries mount after PwC ‘failed to notice’ mistakes [Times Online]
JP Morgan settled with the UK’s Financial Services Authority (“FSA”) last week over its mishandling of client funds, fining the bank £33.3 million. Now the Financial Reporting Council and the Institute of Chartered Accountants in England and Wales, who both oversee accountants in the UK, are now expected to launch inquiries into PwC’s role in JPM misallocation of client funds of £1.3 billion to £15.7 billion between 2002 and July 2009:

In addition to serving as principal auditor, PwC was retained by JP Morgan to produce an annual client asset returns report — a yearly certification to prove that customers’ funds were being effectively ring-fenced and therefore protected in the event of the bank’s collapse. But PwC signed off the client report even though JP Morgan was in breach of the rules.

MOVES-Barclays Wealth, Deloitte, BlueCrest Capital, RFIB [Reuters]
Reuters reports that Deloitte’s tax practice promoted eight new partners: Pippa Booth, Andy Brook, Stephen Brown, Christie Buck, Sue Holmes, Anbreen Khan, David McNeil and Marcus Rea and three associate partners: Andrew Cox, Ashley Hollinshead and Claire Wayman.

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